Strategic Alignment:

Values-Vision-Mission (VVM)

Fiat Chrysler Automobiles

Global Strategic Management

MBA 6073
Dr. Jim Higginson

By:
Naresh Sharma
Introduction:
During the economic meltdown of 2008, automotive companies in north-
America suffered the most. Some companies went into bankruptcy protection
and required government assistance to stay afloat. Chrysler LLC was one of those
and became part of $85 billion bailout for re-structuring. During this time, Fiat of
Italy (Europe) and Chrysler of United States of America merged to become Fiat-
Chrysler Automobiles (FCA) Group.
FCA group; headquartered in Auburn Hills, MI re-aligned their vision from
the founding philosophy of Chrysler: “Design with Purpose” to return to
profitability.

Vision:
"Our vision is to build cars and trucks people want to buy, will enjoy driving
and will want to buy again."

Analysis:
Analysing the above vision statement against the fundamentals of Strategic
planning, it definitely is not vague or does not uses overly broad language since it
hits the nail right in the head by stating that vision is to build cars and truck.
Accordingly, it paints the clear picture of the company’s core business and where
it is headed. It certainly makes it memorable and provides some wiggle room for
adjustments by adding.. ”people want to buy”. This allows the company to
constantly adjust its product line to suit the ever-changing technological
environment and taste of customers.
The negative assessment of this vision statement falls under being too
generic and does not lead to future directional path. Though it provides specific of
“people… will want to buy again” but does make no mention of globalization or
expansions to provide best value for its shareholders. Since automobiles have
direct impact on the environment, it blends its mission statement with vision to
fulfil its social obligations.
Mission Statement:

The FCA Group’s Commitment:

”Reduction of environmental footprint, safety and connected vehicles, increasing
product competitiveness”

Keeping in mind their societal responsibility, Company focuses on reduction

of environmental footprint right from the raw material stage to end of the life-
cycle of its product while maintaining their focus on safety and efficient info-
mobility system. Lastly, in order to stay competitive and provide value to its
share-holders intends to maintain its market share and profitability by increasing
its product competitiveness.

Values:

Though FCA group emerged after the economic meltdown of 2008 and was
headed by the then CEO, Bob Nadelli, yet their current core values are personally
written by their current CEO: Sergio Marchionne. They are as below:

There is a world where people don’t just let things happen. They make them happen.
They don’t check their dreams at the door. They get involved.

They take risks. They leave their mark.

It is a world where every new day and every new challenge brings the opportunity to craft a better future.

These core values are fundamentals of success not only for every business
but an individual. I personally have visited their head-quarter in Auburn Hills and
their plan in Windsor, ON and can vouch that these core-values are written where
staff members usually assemble, mingle or even eat and relax. These values are
inculcated in such a way that it has become the fundamentals and guiding
principal of their action. Continuous success of the company in the last
consecutive six years can be attributed to these core values.

Governance:

1. Sergio Marchionne – Chairman & CEO

2. Mike Manley – Chief Operating Officer & President Jeep Brand
3. Al Gradner – President of Chrysler Brand
4. Tim Kuniskis – President of Dodge Brand
5. Oliver Francois – Chief Marketing Officer and Head of Fiat Brand
6. Harald Wester – Chief Technology Officer
7. Richard Palmer – Chief Financial Officer

Strategic Planning:
In their strategic planning, CEO and Chairman has clearly indicated that:
“Forward-looking statements are not guarantees of future performance. Rather, they are based
on the Group’s current expectations and projections about future events and, by their nature,
are subject to inherent risks and uncertainties”.

When charting the strategic planning, the company management seems to

have considered the “external” as well as “internal” factors which required
attention and seems to have put in-place a mitigation plan for obvious and not so-
obvious threats which could derail their plan. There is clear mention about the
strength of their Jeep and Ferrari Brand, favourable consideration of NAFTA
provisions while political and economic threats for un-certainties arising from
Brazil have seriously been considered. Review of the documents clearly indicate
that all four elements of “Corporate, Business, Functional and Operational”
objectives of strategic planning have been considered and clearly outlined.
Finances:
In their strategic planning on finances, Company aims to reach a target
production of 7 million vehicles by 2018. As per their updated records, FCA group
has revised their projections upwards in terms of net revenues. Company had a
net revenue of $96 billion in 2014; $113 billion in 2016 and aims to reach at $135
billion by 2018.

Value for Shareholders:

During the economic meltdown in 2008, the market price of Chrysler share
had fallen to $0.72, which after five years of successful operation has come back
to $6.72 (at the time of this report) and the company is projecting to bring the
EPS (earnings per share) to at least $9.48 by 2018 which would eventually boost
up the stock price.

References:
1. http://retailindustry.about.com/od/retailbestpractices/ig/Company-
Mission-Statements/Chrysler-Mission-Statement.htm
2. http://www.fcagroup.com/en-US/innovation/Pages/mission.aspx
3. http://www.fcagroup.com/en-US/governance/fca_governance/Pages/
default.aspx
4. http://www.fcagroup.com/en-US/investor_relations/
events_presentations/quarterly_results_presentations/
FCA_2014_18__Business_Plan_Update.pdf